Government regulations aimed at reducing reducing risk at the nation's banks in the wake of the 2008 financial crisis are having the opposition effect, influential bank analyst Dick Bove told CNBC on Monday.

"While the government put kind of a ballistic missile in place to hit the banks, they missed the banks altogether. The banks are doing just great. They hit the American public. That's who they've hit," Bove of Rafferty Capital asserted in a "Squawk Box" interview.

"When you over-regulate [the] industry and you continue to print money … you are stimulating the shadow banking market," he said—echoing the premise of his new book "Guardians of Prosperity: Why America Needs Big Banks."

Bove said the government is disincentivizing lending at large institutions—pushing transactions "out of the regulated markets into the unregulated markets."

As a result, he said, "The risk in the financial system has been increased meaningfully," as mortgage, auto loan, and personal finance companies pop up to fill the void in a historically low interest rate environment fostered by the Federal Reserve's easy monetary policies.

"The United States is really going in the wrong way in terms of the legislation and the rules and the regulations that have been put in place," Bove said.

His comments come as JPMorgan looks to be nearing another huge settlement with the government. According to media reports, this time it's over allegations the bank ignored signs of Bernie Madoff's Ponzi scheme.

Over the past 12 months, JPMorgan has paid some $20 billion to resolve government investigations, including the record $13 billion payment over allegations of sales of troubled mortgage securities in the lead-up to the 2008 financial crisis.

Despite its legal troubles, shares of JPMorgan soared 35 percent in 2013—in line with the strongest gains of the financial industry since 1997, and outpacing the S&P 500 Index's 30 percent increase.